Gbit Ethernet competition hits boiling point

AUSTIN, Texas  Three new entrants to the Gigabit Ethernet-over-copper market are fielding transceiver silicon that will challenge the established players, adding fuel to a market that Dataquest Inc. predicts is headed for rapid growth.

Massana Inc., which does much of its development in Dublin, Ireland, announced Monday (Feb. 11) that it is entering the market for Gigabit Ethernet over copper with single-port physical layers (PHYs) used in network interface cards (NICs) and the quad-port transceivers required for the switch market.

Mysticom Inc., which has much of its engineering staff in Neyanya, Israel, announced several weeks ago that it would field PHY silicon, joining Austin-based Cicada Semiconductor Inc., which already is shipping a quad-port PHY.

All three will challenge the two dominant players in the gigabit PHY market, Broadcom Corp. (Irvine, Calif.) and Marvell Semiconductor Inc. (Sunnyvale, Calif.).

In many respects, Cicada, Massana and Mysticom are similar: venture-backed companies with roughly 75 employees each, and veteran engineering teams that have developed transceivers on an intellectual-property basis during the past several years. The players in the Gigabit Ethernet-over-copper field also are developing silicon for backplanes, storage networks, and for fiber-based networks operating at gigabit and 10-gigabit/second speeds.

Because Gigabit Ethernet-over-copper runs over standard Cat-5 cabling, with four pairs of twisted-copper cabling, the opportunity to replace fast (10/100-Mbit/s) Ethernet is enormous. Though some enterprises have split, or otherwise degraded, Cat-5 cabling, an estimated 90 percent of the installed corporate network can be used for Gigabit Ethernet links.

Joe Byrne, a Dataquest-Gartner analyst who issued a bullish report in January on LAN semiconductors, said that starting next year corporate IT managers will opt for Gigabit Ethernet "whether they need it or not" as they buy new servers, switches and performance desktops and laptops. Costs for the silicon will come down sharply as the three new PHY entrants try to chip away at Broadcom and Marvell. If the cost difference is not that much, IT managers won't want to get stuck with out-of-date fast Ethernet links, Byrne said.

"This will largely be a vendor push in the market," Byrne said. "It is not obvious that the average user will need gigabit links, though we may see some video to the desktop in a few years. But in order to keep the new machines balanced between the computational power and the networking, IT managers will look at the cost difference between fast Ethernet and GigE Gigabit Ethernet, and by 2003-2004 the vendor push will catch up with them," Byrne said.

Building on the already healthy market for Gigabit Ethernet switches, the NIC market will start to take off next year as well. By 2005, the overall market for Gigabit Ethernet silicon  over both copper and fiber  will reach $2.7 billion, Dataquest predicts.

Particularly for the single-port NIC market, a single-chip solution will be required in order to compete on costs.

For the NIC market, Massana chief executive officer Paul Costigan said the emerging PHY vendors will all need to develop partnerships to integrate the digital media access controller (MAC) on to the PHY. While forming those partnerships is not trivial, Costigan said it will be the PHY vendors that control those partnerships. "The technical challenge of the MAC pales before the task facing anyone seeking to develop a PHY at these speeds. Very few companies have the mixed-signal design expertise required," he said.

While power consumption is important in the densely packed switches, the NIC market may compete largely on price.

"Power consumption is important, but that is only one figure of merit. The main thing is to be able to keep the heat within a range so that you can put the die into a cheap plastic package. Cost is the more important factor," Costigan said.

Sharp drop ahead

Indeed, Byrne's recent Dataquest report predicts that prices for Gigabit Ethernet silicon will drop sharply. An integrated solution (PHY plus MAC) will drop from $15 this year to $7.88 in 2005, and the per-port cost of a PHY also will drop sharply, to $8 per port this year from $18.70 last year, and continue to decline to $4.86 per port by 2005.

Partly for cost reasons, both Massana and Cicada are using Taiwan Semiconductor Manufacturing Co.'s standard 0.18-micron foundry process, while Mysticom's silicon is fabbed at United Microelectronics Corp. on its 0.15-micron process. Broadcom was an early adopter of TSMC's 0.13-micron process, and while Broadcom officials acknowledge that yields are not yet optimal, Broadcom will be able to ride down the yield curve as TSMC smooths out its 0.13-micron process flow.

Marvell currently is at 0.15-micron design rules and will switch to 0.13-micron as volumes increase, according to Marvell product line manager David Young.

While Costigan at Massana emphasizes costs, Cicada CEO Nick van Bavel said power consumption is as important, partly because a chip with high junction temperatures is more likely to fail. Though van Bavel said the exact figure is proprietary, Cicada claims that its PHY products consume less than 1 watt per port at 0.18-micron design rules.

"There are substantial differences in power consumption between Massana, Mysticom and Cicada, which translate into a huge quality difference. The companies that draw more than 1.1 watt per port will have reliability issues in a plastic package, and that is why many of the vendors use a tape BGA ball grid array package," van Bavel said.

Marvell's Young counters that "all the quad vendors, including Cicada, must use some form of thermal enhancement for the package."

Marvell next month will start sampling a package measuring 9 mm on a side for single-port devices aimed at notebook computers and fiber module slots. Next Tuesday (Feb. 19) Marvell will announce a quad-port PHY in a 21 x 21-mm plastic ball grid array that will allow switch vendors to reduce the form factor of the standard 48-port switches.

All of the PHY vendors compete on their ability to detect substandard CAT-5 cabling, in situations where only two pairs are aligned, for example. Rex Kiang, product-marketing manager at Mysticom, said, "Speed optimization over impaired cabling is an important attribute. If someone has stomped on a cable, or a door was closed on it, the Mysticom PHY can detect the quality of that link."

"Sniffing out the quality of the cable network," Massana's Costigan said, "and the ability to combat distortions, is as important as power consumption."

Tough market to crack

This year and next, the market will determine whether the three new entrants can take share away from Broadcom and Marvell.

Broadcom supplies silicon to 3Com Corp., a major player in the NIC market, and has shipped more than 3 million ports of Gigabit Ethernet over copper thus far, said marketing manager Victor Hu. Intel Corp.'s networking division partners with Marvell for Gigabit PHYs, giving Marvell the leading position thus far.

Broadcom's Hu said he had expected more competition in the market thus far. "Other than Broadcom, Marvell is the only other company to have introduced a production-worthy part. That will change, but the fact that both Marvell and Broadcom have field-proven devices is a big advantage. And in Broadcom's case, since we already have worked out the issues with our 0.13-micron design, we have the smallest die size."

Intel, which failed with the gigabit PHY silicon that came with Intel's acquisition of Level One, will try again to develop its own PHY, Byrne believes, thus ending the "margin-splitting" relationship with PHY provider Marvell. "Intel is the kind of company that doesn't give up, and while I don't have any inside knowledge about their plans, I think Intel will keep trying to develop their own PHY" for Gigabit Ethernet over copper, Byrne said. National Semiconductor also is fielding a second-generation gigabit PHY that may gain traction in the market, he noted.

The new entrants face a major challenge in establishing their credibility, Byrne said.

"The established producers are fitting the bill today. I do see market share shifts as the opportunities grow for the other companies, but it will be a tough row to hoe," Byrne said. "This is a good time to get in because the market will grow so fast, but it will be very challenging. It will take great products to take advantage of any cracks around the competing suppliers," he said.

Broader sourcing

It won't be long before the switch and NIC companies get to source from a much broader array of products. Cicada started shipping its quad-port PHY recently, and will have its single-port PHY in full production next month, van Bavel said. Massana CEO Costigan said its single-port PHY will begin shipping in the second quarter, and the quad-port transceiver will follow in the third quarter. Mysticom is sampling its single-port PHY, but has yet to announce its plans for a quad-port product, Kiang said, noting that Mysticom already has a 10-Gbit/s PHY for the optical end of the Ethernet market.